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Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Selling price Variable expenses
Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Selling price Variable expenses Per Unit $120 Sales 100% Contribution margin 78 $ 42 65 35% Fixed expenses are $84,000 per month and the company is selling 2,600 units per month. 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $5 per unit and increase unit sales by 20%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 281 Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $5 per unit and increase unit sales by 20%. Net operating income by Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Percent of Selling price. Variable expenses Per Unit $120 78 Sales 100% 65 Contribution margin- $ 42 358 Fixed expenses are $84,000 per month and the company is selling 2,600 units per month. 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-qualit components that increase the variable expense by $5 per unit and increase unit sales by 20%. 2-b. Should the higher-quality components be used? Complete this question by entering your answers in the tabs below. Req 2A Req 28 Should the higher-quality components be used? OYes ONO
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